Insurance companies offer a variety of life insurance products to suit various needs and goals of customers and policy holders. One such product is term life insurance, whereby a policy holder pays a premium to be insured against death, and in some cases serious injury, for a period of time specified by the policy term. A term life policy only remains in force for the policy term, and the policy accrues no cash value. More recently, insurance companies have offered different forms of permanent life insurance, whereby a policy holder may pay a single premium, periodic premium, or some combination to cover insurance costs for an open-ended policy and to fund one or more underlying savings and/or investment accounts. A permanent life insurance policy has an assured payout as long as the policy is kept in force and accrues a cash value through the underlying accounts. Permanent life insurance policies present a number of attractive features to customers in addition to the life insurance component itself, such as the tax advantages associated with investing in the underlying accounts.
Among the different types of permanent life insurance policies are universal life insurance and variable universal life insurance. Under a universal life insurance policy, premium payments beyond costs associated with the insurance component of the policy (e.g., the cost of insurance) are credited to the policy's cash value and may accrue interest, such as at a rate tied to an index and/or via a fixed-rate investment account. Subsequently, costs for maintaining the insurance component of the policy may be drawn from the cash value, allowing premium payments to be skipped. A variable universal life insurance policy has the further advantage of investing flexibility, providing a wide variety of investment vehicles and funds, often similar to mutual funds and/or sponsored by various asset managers, from which a customer may choose. The costs associated with the insurance component of a policy, and consequently the amount remaining from premium payments that are available for investment, depends on and may vary with a number of factors, including the age and health of the insured.